Ideas Blog

Alphabet Soup

To this day, I’m a terrible speller. It’s all Campbell Soups’ fault. A spellchecker should have been standard issue in the can. Lucky for us in the channel, we have three-letter acronyms for everything. This makes spelling really easy but not so good when it comes to clarity.

I know most, if not all of these, sound familiar to you: VAR, MSP, ISV, OEM, SI, VAD, SP, LAR, LSP…you get the picture. It’s always easy to “label” something. In this way, we can all agree on what we are talking about. It’s a channel language that no one else speaks except for us clever channel people. Hell, ask my mom what “VAD” means, and she is likely to think it’s some bad word she’s never heard of.

Ah, but therein lies the problem–we can’t agree on anything. We need a meaning checker for channel acronyms. We see the letters. We recognize the letters. We form a mental picture with the letters. But ask channel people for definitions of these acronyms, and likely not many of us would agree. It’s a problem I’ve experienced since day one in the channel business.

When talking with partners, I never ask what they call themselves. It’s like asking my pretentious friend to describe herself–i.e., whatever she says is her opinion and not necessarily what I would say. When engaging a channel partner, I simply ask, “How do you make money? Products? Services? How much of each?”

Taking an MSP, for example, and plot it on this graphic. I bet where I plot an MSP will be very different than where you plot the same MSP, which will likely be different from where the MSP plots itself. But if we specifically asked, “How much of your revenue comes from product vs. services?” we would likely all agree on where to plot MSP.

A few weeks ago, Gary Bixler, an esteemed channel colleague, asked, “Carlos, conceptually, what is the difference between an SI and an MSP?” Even as the channel geek that I am, I’ve never been asked this question. So, I paused and thought for a little bit. My response to Gary was, “It depends”.

I know many SIs that consider themselves MSPs. Conversely, there are MSPs that see themselves as SIs. So my “depends” has to do with how a channel partner makes money and not how its labeled. From a business standpoint this is the most critical factor to consider, particularly when it comes to recruiting partners. If a channel partner’s primary revenue source is from services, for example, what services are provided and how they are delivered is really immaterial. The reality is that a partner’s business model and subsequent structure (organizational, financial, etc.) is based on its primary revenue source.

So next time someone blurts out a channel partner acronym, stop and engage in a conversation about business models. If you don’t, you could end up like my mom.